The European Union and the chief manager of the World Trade Organisation, Mr Pascal Lamy have sought, as one of the measures to facilitate a smooth passage of the Mini-Ministerial talks prior to the larger Doha gathering, to make a further concession to the Latin American banana producers in their case against the EU-ACP agreement on access to the EU market. Lamy was of course a former EU Trade Commissioner, and his successor Peter Mandelson has lauded the offer of a gradual reduction between now and 2015 of the EU’s tariff on banana imports from 176 euros per ton to 116 euros per ton.
The Caribbean states which had struggled against the last reduction of the tariff to 176 euros, were naturally unhappy with the new proposal. But it turns out that, as of now the Latin Americans are themselves not satisfied with this latest EU offer. It is not clear whether they are dissatisfied with the time span for reduction, or whether the new figure proposed by the EU is still deemed too high. But, from a Caribbean point of view, any further compromise on either quantum or time period, will be worse news than the present.
Banana producers and governments of the Caribbean must be well tired of this long-running saga. For negotiations on the terms of access for our, as well as others’ bananas in the European market, have been going on from as far back as 1986. Then the European community had signalled that, with the onset of the Single Market and Economy, the terms of trade in bananas would have to be liberalized, and the market made much more substantially open to non-ACP bananas.
Efforts to come to terms with this issue – in effect to find a basis for a new Banana Protocol, have been going back and forth ever since. At first Caricom, predominantly Jamaica and the Windward Islands thought that by 1992, when the Single Market and Economy was to come on stream, they had arrived at an agreement satisfactory to both themselves and the British government. But the British faced hostility from within the EU itself, particularly from states like Germany, the Netherlands and Denmark, traditionally accustomed to free trade in bananas. And while Germany’s resort to the European court at that time, for a negative ruling on the new agreement seemed unsuccessful, a further appeal by the Latins, now bolstered by the United States, to the GATT and then the WTO after 1994, ruled against the tariff arrangements under the protocol.
There were important lessons to be drawn from these episodes. First, that the British government was no longer in a position to have an EU-ACP agreement on agriculture easily accepted by important countries in Europe itself. And secondly, that at the wider level the United States, in the context of both its commitment to ensuring the increasing liberalization of the European market in various spheres, and also in terms of the protection of the position of dominance of the banana trade of its multinationals, would consistently support the position of the Latins, and leave the British to deal with the ACP states. After all, the decision to go to the WTO was made by President Clinton of the Democratic Party, normally deemed by us to be Caricom’s better friend in the American political system.
So between the mid-1990s and the present, the British have been perceived by some as engaged in a continual appeasement of the US-supported Latin American producers, the latest act in this play being their, and the EU’s offer of a new tariff level – only to have their offers rejected either peremptorily by the Latins and the US themselves, or by the WTO.
Ironically, it might be said in passing, the Latins – now led by Brazil in particular, and in conjunction with some African states, have sought to use the WTO weapon against the United States’ protection of its own agriculture, particularly sugar and cotton, and have been successful in doing so. But what this has meant from a Caricom point of view, is that sugar has now joined bananas as ‘under threat’ from the juggernaut of liberalization wielded by the powerful.
In a sense, Caricom is not in a position to complain. For as we joined the WTO – some of us wittingly, others of us as a matter of form and commitment to universalism – we did not really perceive that the notion of special circumstances that could be used to induce the WTO to adjudicate in terms of “special and differential treatment” would not be acceptable. Indeed, when the Windward Islands of the OECS commenced their discussions on the new terms of entry of bananas into the proposed EU, none of them were members of the GATT. And now it is the Latins who claim discrimination against themselves, by some of the smallest countries in the world.
Today, as is obvious in terms of both the sugar and banana industries important to Caricom, our concerns about these industries are engulfed in a negotiating juggernaut much larger than ourselves. The negotiating struggle between the so-called emerging market economies including our neighbour Brazil, and the United States, for equality of access to each others’ markets, a negotiation proceeding in terms of bargaining over multiple commodities simultaneously, means that our interests in our particular single commodities, and therefore single ‘offers,’ are minor elements in the overall play.
Brazil has sought to persuade Guyana and Belize that there can be alternative uses for some of their sugar, and that it is for governments to decisively make up their minds in the not too distant future. In the case of bananas, it is as if our farmers and their business institutions have resigned themselves to a perpetual squeeze, as both in Jamaica and the Windward Islands the acreage under banana cultivation has declined quite drastically, the number of farmers has declined and so has the volume of banana exports.
This situation is being exacerbated by the dramatically increasing costs of pesticides and fertilizer, and the costs of transportation. Producers are being forced to ask themselves whether even the aid provided and further promised by the EU, can make a difference in terms of market competition and high costs. In which context it is worth noting that the major exporters from Jamaica, Jamaica Producers, have for some time sought to find an appropriate scale of production to match these perceived disadvantages, by producing from plantations in Central America and diversifying into other agricultural products.
Caribbean and ACP countries immediately denounced the new EU offer as an unacceptable threat to their producers. The Latins, smelling blood have, on the other hand, as we have seen, rejected the offer. The Caribbean Community, currently bogged down in seeking to maintain some coherence in terms of the other outstanding EU offer, must find it burdensome to have to deal with these two matters at the same time.
But then, as the major players at the WTO hasten to find some modus operandi for proceeding to reconciliation at the resumed Doha Round, they obviously feel that concessions and counter-concessions have to be made on all available fronts. The larger ACP states, when not basically supporting the position of Brazil and the emerging economies, are as a group currently consumed with their own EPA discussions. And even interested Europeans will be observing that concurrently, in one of the smallest banana producing states, St Lucia, the farmers’ organizations are involved in an internecine struggle for institutional dominance of their small industry.
Who could not help feeling that Caricom’s banana matter is now somewhat out of our hands?
